Saying federal regulations have created a “stone wall” preventing Connecticut residents from enrolling in a new state health insurance plan, Gov. M. Jodi Rell has asked U.S. Health and Human Services Secretary Kathleen Sebelius to consider relaxing the rule.
The state created the Connecticut Pre-Existing Condition Insurance Plan to comply with a requirement in the health reform law for states to have insurance pools for previously uninsured people with pre-existing conditions.
Coverage under the plan began Friday, with only five people enrolled. Rell said enrollment could be limited because of the federal “crowd out” rule that requires a person be uninsured for at least six months before joining the plan. Some public insurance programs use such policies to prevent people from dropping private coverage to join a public program.
“Implementation of such a restrictive, no-exception crowd-out/waiting period policy seems to contradict the stated goals of providing access to health insurance for those individuals with pre-existing conditions,” Rell wrote to Sebelius.
Rell recommended that the department approve “reasonable and good-cause exceptions” to the six-month waiting period. She noted that the state’s Charter Oak Health Plan also has a six-month crowd out period, but allows exceptions for people who lost their previous coverage because of extreme economic hardship, the expiration of coverage under COBRA, or no longer being enrolled in the state’s HUSKY program.
“I believe that these accommodations are essential if the Pre-Existing Condition Insurance Program is expected to achieve its goals of providing crucial health coverage to individuals who otherwise cannot access coverage,” Rell wrote.
Rell described the exceptions used in Charter Oak as cases in which people lose coverage through no fault of their own, and cited the example of a parent who loses HUSKY coverage when his or her child turns 18.
“In this regard, such a newly uninsured person is no different from other uninsured individuals who need and are able to access this important program,” Rell wrote.
In addition to the five people enrolled in the pre-existing condition insurance plan Friday, one person is slated to receive coverage under the plan beginning next month, according to the state Department of Social Services. Including the six who enrolled, 165 people who applied were eligible for the program.
Rell said in the letter that people who qualified for the pre-existing condition plan were opting to join Charter Oak, which charges $307 per month in premiums. The pre-existing condition plan’s premiums rise with age, and for anyone 30 and older, cost more than the Charter Oak premiums.
Like many states, Connecticut already has high-risk insurance plans for people with medical conditions. Their premiums cost more than the new plan, in some cases, by hundreds of dollars a month.
Because of the crowd out rule, people enrolled in those plans would not be eligible for the new plan unless they gave up the insurance for six months. But officials have noted that the goal of creating a new plan was to expand coverage to people without insurance, not to lower the price for people who have it.
The pre-existing condition insurance plans created under the health reform law are being funded with $5 billion in federal money and are expected to run until 2014, when insurers will be prohibited from excluding people with pre-existing conditions.